"If I Get Even A Whiff Of An Investigation, I Want To Get Out"

Hedge funds involved in an investigation into insider trading -- even if their actions are found to be 100% above board -- are guilty by association says the head of a fund of hedge funds, a firm that invests in several hedge funds.

The fund of funds man told the Financial Times, "If I get even a whiff of an investigation, I want to get out before the next guy, especially if I know they have illiquid stuff or I don’t know what they have."

Many people would probably agree with him about the funds that have been raided.

But what's interesting about his opinion is that it applies not just to the funds that have had search warrants out on them, but to funds that have just been subpoenaed, too.

Most people probably consider SAC Capital, billionaire hedge fund manager Steve Cohen's shop, to be the one fund involved in the latest investigation that is untouchable even though the fund recently received a subpoena for information from the FBI.

Just take into consideration what a former SAC Capital trader told us last year, "the trading floor at SAC is the cleanest in the biz."

Cohen's returns are so good and he's such a legend that people seem to assume he'll be fine.

But if everyone else feels the same way that the head of the fund of funds does, even SAC may not come out of this unscathed.